Should I buy an apartment or a house?

Rates and Fees verified correct on October 27th, 2016

Apartments vs houses which should you buy?

Apartment vs house: Which property should you buy and why?

There’s one important question that divides many Australian home buyers: should I buy a house or an apartment? While the answer is clear cut for some people, the choice is not so easy for others.

While some people prefer the space and flexibility of living in the suburbs, others favour the convenience of inner-city living. From price to space and maintenance requirements, both houses and apartments have several pros and cons. Check them out below.

Home graphicThe benefits and disadvantages of living in a house


  • Space. If you want to conquer the final frontier and get more space for your family to live in comfortably, houses offer far more room to move than apartments.
  • Outdoor space. If you have a green thumb, you want to expand your home or if you have young kids, a backyard is useful. You can build a pergola or entertaining area and enjoy the freedom of having your own outdoor space.
  • Flexibility. If you own a house, you can more or less do what you want — there are no owners’ corporation or strata laws to abide by. As long as you keep council and building regulations in mind, you’re pretty much free to renovate however you like. This means you have the flexibility to conduct upgrades to improve your quality of living.
  • Privacy. Another benefit of living in a house instead of an apartment is that you’re generally not living in as close proximity to your neighbours. So you can enjoy your life without having to worry about disturbing your neighbours.


  • Maintenance. When you own a house, there are lawns to be mown, gutters to be cleaned, trees to be pruned and windows to be washed. Some people love getting their hands dirty on DIY projects around the home, but these sort of tasks are nothing but chores for others.
  • Higher costs (and more bills). Living in a house is generally more expensive than living in an apartment. This is often due to the larger space of a house, which results in  higher gas and electricity bills.

The pros and cons of living in an apartmentApartment graphic


  • More affordable. While there are some exceptions to the rule, apartments are generally cheaper to buy than houses. According to figures from Domain Group, when Sydney’s median house price passed the $1 million mark in June 2015, the median apartment price was $656,078.
  • Less maintenance. You don’t have to mow the lawn or tend to the garden when you own an apartment. There’s also the fact that there are plenty of maintenance tasks that can be looked after by strata, meaning you have more free time to do whatever you want.
  • Low cost. While the reduced space of apartments can be a drawback, it also results in cheaper electricity and gas bills because you only have to heat and cool a smaller area.
  • Location. As a general rule, apartments allow you to live closer to everything, from transport and schools to restaurants and even your work.
  • Extra facilities. Owning an apartment might also give you access to a whole host of building facilities. There could be a pool, gym, tennis courts, playground, and even a shared garden. These added inclusions need to be taken into account when deciding whether to buy an apartment or a house.
  • Security. Thieves often have to pass through several layers of security to get to your apartment door, which isn’t the case with many houses.


  • Owners’ corporation by-laws. Living in an apartment means abiding by the rules imposed by the owners’ corporation, such as not hanging washing over the balcony or not having pets in the property. If you want to renovate or upgrade your apartment, you may need to seek approval first.
  • Fees. You’ll also need to pay a fee to the owners’ corporation to cover shared maintenance costs, so remember to take this into consideration when calculating total costs.
  • Less space. Apartments don’t offer as much living space as houses.
  • Less privacy. If you don’t like listening to your neighbours fight, entertain guests or get up to anything else in the privacy of their own home – or the fact that they can probably hear you doing the same things – apartment living may not be for you.

Which makes the better investment?

The house vs apartment debate doesn’t only divide owner-occupiers; investors can also have differing views as to which represents the strongest financial option. The traditional view is that houses make better investments because the land they are situated on will often appreciate in value.

But there are other investors who point to the changing lifestyles of Australians as proof of the growing value of investing in apartments. According to the Australian Bureau of Statistics (ABS), the portion of people living in separate houses dropped from 86% in 1981 to 76% in 2011. It seems that more and more of us are happy living closer to the city and all the entertainment options and amenities it offers, so there are plenty of arguments that point towards apartments as a wise investment decision.

So if you’re trying to decide whether to invest in a house or an apartment, it’s worth looking past the type of property and examining each potential investment on its merits. Where is it located? What facilities does it offer and what other amenities are nearby? What sort of capital growth could you expect from this type of property? How much rental income could the property generate? Answering these questions will help you make up your own mind.

House vs apartment: making your decision

Regardless of whether you’re an owner-occupier or an investor, the best way to solve the apartment vs house dilemma is to consider your needs and plan ahead. For example, if you’re thinking of starting a family in a few years, is a tiny inner-city apartment really the best option? On the other side of the coin, if your kids will most likely leave home in the next few years, is a massive five-bedroom house the best solution?

Once you know what you need in a home or an investment both now and into the future, you’ll be able to decide whether an apartment or a house is right for you.

Belinda Punshon

Belinda is a journalist here at Specialising in the home loans and property sections, she is passionate about helping Australians improve their financial wellbeing.

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